Report on Marketing Mix Analysis of Uttara Bank Limited

The main objective of this report is to analysis Marketing Mix of Uttara Bank Limited,  report also focus on the organizational setup, function and operations of the UBL. This report mainly encompasses the performance of UBL in comparison the marketing mix analysis. Finally draw SWOT analysis and find out problems related on marketing mix and suggest recommendation to overcome the problem.

Methodology of the study:

Different data and information are required to meet of this report. Those data and information were collected from various sources as, primary and secondary which is showed below:

Primary Sources of Data:

• Personal observation
• Face to face conversation of the officers and clients.
• In-depth study of selected cases.
• Interviewing officers and staffs.
• Relevant file study provided by the officers concerned.
• Working at different desks of the Bank.

Secondary Sources of Data:

• File Study
• Annual report of Uttara Bank Ltd.
• Statement of affairs.
• Bank Rate Sheet.
• Internet
• Progress report of Bank.
• Bangladesh Bureau of statistics report.
• Several kinds of Academic text-book and foreign exchange operations.
• Audit reports.
• News papers, Journals, etc.

Uttara Bank Limited & Its Profile

Uttara Bank is one of the largest and oldest private-sector commercial bank in Bangladesh, with years of experience. Adaptation of modern technology both in terms of equipment and banking practice ensures efficient services to clients. 204 branches at home and 600 affiliates worldwide create efficient networking and reach capability. Uttara is a bank that serves both clients and country.

Historical Background of Uttara Bank Limited

Uttara Bank Limited is deeply related with the history; tradition and living slandered of human of the country. This Bank started its operations on 28^th January 1965 as a commercial bank named by Eastern Banking Corporation, which is interpreting by a privet organization. In 1972 the Bank takes this name Uttara Bank, It had been limited company in 1983 that is named Uttara Bank limited. On 21^st August 1983 it had got certificate for operation their business. Its registered office is situated in 90 Motijeel, Commercial area, Dhaka-1000. This Bank serves their service by 204 branches. It has been scheduled organization of Dhaka Stock Exchange by selling their shears in 1984. It is also been scheduled of Chittagong Stock Exchange in 2004.

Company at glance

• UBL is one of the largest private limited Banks in Bangladesh.
• It operates through 204 fully computerized branches ensuring best possible and fastest services to its valued clients.
• The bank has more than 600 foreign correspondents worldwide.
• Total number of employees nearly 3,562.
• The Board of Directors consists of 13 members.
• The Managing Director who is the Chief Executive Officer heads the bank.

SERVICES

Deposit Schemes

Foreign Currency

Non-Resident Foreign Currency Deposit Account (NFCD)

• All Non-Resident Bangladesh nationals and persons of Bangladesh Origin include those having soul nationality ordinary resident abroad may open this account with AD branch of Uttara Bank Ltd

• The NFCD account may be opened in single/joint name for a period of 1, 3, 6, 12 months.

• This account may be maintained as long as account holder describes.

• On maturity the account holder can encase it in local currency or can transfer the amount including accrued interest anywhere he likes.

• Initial deposit US$1000 or GBP 500sterling or equivalent currency.

• The account offers attractive interest. Payable in foreign and tax-free.

• The account with accrued interest can be renewed either of the instruction of the account holder or be renewed automatically ir there is no instruction otherwise.

No interest is given on premature encashment.

Foreign Currency Account

A) Foreign Currency Account for private individual/firm/organization.

• Any person/firm/organization who earns foreign currency can open Foreign Currency Account with UBL.

• Payments in foreign currency may be made freely abroad from this account and local payment in Taka may also from this account.

• Bank pay interest provided the accounts are maintained in the form of term deposit for minimum period of 90 days.

Requirements for opening of the account

• Account opening form as per format below. The account opening form and signature card to be filled in and duly signed.
• Two copies passport size photographs of the account holder duly attested by remitter’s Banks/Embassies.
• Photocopies of the first 7 pages of the passport duly attested by the remitters bank/exchange companies having drawing arrangement with UBL or by Bangladesh Mission abroad.

B) Foreign Currency Account for Bangladesh Nationals Working and earning abroad.

• No initial deposit is required

• A/c holder may nominate his nominee to operate the account.

• The account holder can freely transfer entire amount in foreign currency anywhere he choose or can convert into Bangladesh Taka currency.

• Funds from this account may also be issued to the account holder upto his entitlement for the purpose of his foreign travels in usual manner.

Requirement for opening of the account:

• Account opening form as per format below. The account opening form and signature card to be filled in and duly signed.

• Two copies passport size photographs of the account holder.

• Copies of employer’s certificate/work permit.
• One copy of the passport size photograph of the nominee if any to be attested by the account holder.

Photocopies of the first 7 pages of the passport of the account holder.

C) Resident Foreign Currency Deposit Account (RFCD):

• Person’s ordinary resident in Bangladesh may open and maintain RFCD Account with foreign exchange brought in at the time of his return from travel abroad.

• Any amount brought in with declaration to customs authorities in the form FMJ and up to US$ 5000 brought in with out any declaration can be deposited in this account.

• Balance in this account can be freely transferred abroad.

• Funds from this account may also be issued to the account holder for the purpose of his foreign travels in the usual manner.

Interest in foreign currency is paid in this account if the deposits are for a term of not less than one month and the balance is not less than US$1000 or GDP 500 or its equivalent.

Requirements for opening of the account

• Account opening form as per format below. The account opening form and signature card to be filled in and duly signed.

• Two copies of passport size photograph of the account holder.

• Photocopies of the passport and the relevant pages showing evidences of traveling abroad.

Savings Account:

• Any Bangladeshi National residing home or abroad may open savings account with UBL.

• This account may be opened in single/ joint name.

• The account holder may nominate his nominee in this account.

• The nominee can get the balance amount without submitting succession certificate after the death of account holder.

• The new account holder must have an introducer who has an account in this branch from before.

This account bears usual rate of interest.

Requirement for opening of the Account

• Account opening form as per format below. The account opening form and signature card to be filled in and duly signed.

• Two copies passport size photographs of the account holder.

• Photograph of the nominee (if any) duly attested by the account holder.

• Photocopy of the 1^st 7 pages of the passport for non-resident Bangladeshi national.

Signature in the account opening form/card must be same with the signature of the passport.

FDR Account:

• Any Bangladeshi national residing home or abroad may open FDR with UBL.

• FDR may be opened single/joint name for a period of 3, 6, 12, 24 and 36 months.

• UBL offers attractive/Competitive rate of interest in FDR.

STD Account:

• Government, Semi-Government, Autonomous organization and an individual may open STD Account with UBL.

• UBL offers attractive/competitive rate of interest in STD Account.

7 days notice required to withdrawal big amount.

Loan/Advance Schemes

Consumers Credit Scheme

UBL started Uttara consumer Credit Scheme From 1996.

UBL offers opportunity of financial assistance for:

• Motor cycle/car- new or reconditioned.
• Refrigerator/Deep Freeze.
• Television/VCR/VCP/VCD.
• Radio/Two-in-one/Three-on-one.
• Air-Conditioner/Water Cooler/ Water Pump
• Washing machine.
• Personal Computer/UPS/Printer/Type writer.
• Sewing Machine
• House hold furniture-Wooden & Steel.
• Cellular Telephone.
• Fax, Photocopier.
• Electric Fan
• Bi-cycle
• Dish Antenna
• Baby Taxi, Tempo/Microbus..
• Kitchen articles such as Oven, Micro-oven, Toaster, Blender, Pressure Cooler etc.

Special Features

• No collateral security is required.
• Simple rate of interest.
• Quick sanction
• Maximum loan amount Tk. 3,00,000/-

• 5%incentive on total interest charged.

Personal Loan Scheme

UBL started personal loan scheme for salaried officials of reputed organization from 1999 to meet-

• Dependents
• Emergency expenses of urgent surgical operation/medical treatment.
• Emergency educational expenses of the children for admission/purchase of books, examination fees etc.

Special Features

• Any permanent salaried employee aged between 20-55 years is eligible to get loan.
• No collateral security is required.
• Maximum amount of loan Tk. 1,00,000/-
• Maximum period of loan up to 3 years.

International Banking:

UBL is equipped with all modern technology & provides following international banking services.

• Play vital role in Import-export and other foreign currency of the country through more than 600 foreign correspondents worldwide.
• Renders fastest service to the exporter and importer through the SWIFT service.
• Offers competitive price for importers and exporters.
• Provide support to the exporter and importer by extending working capital, pre-shipment, post-shipment facilities.

Upholds its commitment in international payment.

Treasury and dealing room

UBL has got its independent treasury and dealing room equipped with Reuters Dealings System and provides.

• Effective service to the client.

• Daily exchange rate buying selling.

• Forward cover at competitive price.
• Deals in foreign currency with Central Bank, Commercial Bank and other potential clients.

• Buying and selling third currency with all leading Banks worldwide.

Covers exchange fluctuation risk by providing competitive premium.

Lease Financing:

UBL started lease financing since September 1999.

UBL offers opportunity of financial assistance for:

• Capital Machinery.

• Heavy Construction Equipments.

• Lift

• Air-Conditioner

• Medical Equipments

• Consumers Durables.

Special Features

• UBL provides 100% fund for purchasing equipment / machinery usually BMRE purpose.
• No down payment is required.
• Tax benefit.
• Financial Assistance without flowing own fund.
• Off Balance sheet Financing.
• Prompt service.

Home Remittances:

Remittance in Taka currency and in foreign currency from abroad-

Any Bangladesh National residing, working and earning abroad can remit their earnings in Bangladeshi Taka as well as in foreign currency through the Banks / Exchange Companies having drawing arrangement with UBL. Such remittances and delivered to the beneficiaries expeditiously through its close / wide network of 204 branches all over the country. It also ensures delivery of remittance to the beneficiary with in 24 hours.

Any person can take the service of the 600 correspondents of UBL worldwide for remitting any foreign currency to his beneficiary in the country.

GENERAL BANKING DEPARTMENT

Introduction:

General Banking creates a vita link between customers and bank. It’s really a classic as crucial department for the progression of the bank. It is the introductory department of the bank to its customers. Uttara Bank Limited, Green Road Branch has all the required sections of general banking. Everyday it receives deposits from customers and meets their demands for cash by honoring instruments. General banking department is that department which is mostly exposed to the maximum number of the bank customer.

Green road branch of Uttara Bank Ltd has full-fledge arrangement for providing general banking facilities and has the following major section.

• Account Opening Section
• Cash Section
• Clearing And Collection Section
• Remittance Section

Account Opening

A Person is treated as a customer when he/she opens an account on that bank. Then it becomes a contractual banker customer relationship. The account opening section of Uttara Bank Ltd, Green Road Branch is a very important section. This section takes care of all the relevant duties related to the opening of an account. There are different types of account facilities provided by this branch. These are.

1. Current Account (CA)
2. Saving Account (SB)
3. Short Term Deposit Account (STD)
4. Cash Credit Account (C/C)

Account opening process

Step 1: Receiving filled up application in bank’s prescribed form mentioning what type of account is desired to open. The form is fill up by the applicant himself/herself. Two copies of passport size photographs from individual are taken, in case of photographs of all partners are taken.

Step 2: Applicants must submit required documents. Application must sign specimen signature sheet and give mandate. Introducer’s signature and accounts number are verify by legal officer.

Step 3: Authorized Officer accepts the application.

Step 4: Minimum balance is deposited – only cash is accepted.

Step 5: Account is open and a Cheque book and pay-in-slip book is given.

Different MDS rates

Table: Showing different FD rates. (Effective from 2007)

Source: Bangladesh Bank Circular, 2007.

Closing an account

A customer may close out his/her account at any time by submitting an application to the branch. The customer should be asked to draw the final check for the amount standing to the credit of his account less the amount of closing and other incidental charges surrender the unused leaves of the check book. In case of joint A/C all the joint account holder should signed in the application for closing the account. On receipt of the application the following steps are taken—

1. The signature of the account is verified.
2. The number of unused leaves of the chequebook shall be noted thereon.
3. The manager will approved the application and incidental charges should be debited the account.
4. The account holder is advised to draw the remaining balance from the A/C.

Cheque

A check is treated as an important document in the branch. Check is an instrument in printed from containing an unconditional order signed by the account holder directing a certain person to pay a certain amount only to or to the order of a certain person or to the bearer of the instant.

Cash Section

Cash section demonstrates liquidity strength of a bank. It is also sensitive as it deals with liquid money. Maximum concentration is given while working on this section. As far safety is concerned special precaution is also taken. Tense situation prevails if there is any imbalance in the cash account. The responsibility of the officer of the section is too much high.

Remittance Section

Remittance means transfer of money from one place to another. In banks it is done in the form of DD (Demand Draft), TT (Telegraphic Transfer) or Pay order. The details are as follows:

Demand Draft (DD)
Demand draft is that kind of instrument which is payable on demand. A branch issues it to another branch containing an order to pay a certain amount of money to a certain person. To issue a DD the sender of the DD should have an A/C with that issuing branch. DD can send from one branch to another by cash or cheque. Every bank charge a certain amount as commission is taka 25 for the amount up to Tk. 16000/-, then Tk. 0.15 per hundred.

Pay Order

If any person wants to transfer money within the local area where the bank located then the transfer should be made by ‘pay order’ Deference between ‘Pay Order’ and ‘Demand Draft’ is in terms of place only. Pay order is issued for remitting money within the city whereas D.D. is issued for within the country.

A customer can purchase pay order in different ways:

By cash          cash A/C……………………………………………Dr.

Bills Payable (P.O.) A/C……………………………Cr.

Income A/C commission on remittance……………Cr.

By account    Clients A/C………………………………………….Dr.

Bills Payable (P.O.) A/C………………..………….Cr.

Income A/C commission on remittance……………Cr.

By transfer    Head office/other departments client A/C………….Dr.

Bills Payable (P.O.) A/C……………………………Cr.

Income A/C commission on remittance……………Cr.

Letter of Credit

L/C:

Letter of credit can be defined as a “credit Contract” where by the buyer’s bank is committed (on behalf of the buyers) to place an agreed amount if money at the seller’s disposal under some agreed conditions. Since the agreed conditions include amongst other things, the presentation of some specified documents, the letter of credit is called Documentary letter of credit. The uniform customs and practices for documentary (UCODC) published by international Chamber of commerce (1993) revision, publication on 500 define Documentary Credit:

• Any arrangement however named or described whereby a bank (the issuing bank) acting at the request and on the instructions of a customs (the Application) or on its own behalf,
• Is to make a payment to or to the order of a third party (the beneficiary) or is to accept and pay bills of exchange (Draft) drawn by the beneficiary or
• Authorize another bank to effect such payment or to accept and pay such bills of exchange (Drafts)
• Authorize another bank to negotiate against stipulated documents provide that that terms and conditions are complied with.

Classification of L/C:

• Irrevocable L/C
• Revocable L/C
• Add-Confirm L/C
• Back to Back L/C
• Revolving L/C
• Transferable L/C
• Restricted L/C
• Red Clause L/C
• Green Clause L/C
• Clean letter of Credit
• Documentary L/C
• Straight Documentary Credit
• Irrevocable Negotiation Documentary Credit
• With recourse & with recourse to drawers.

Uttara Bank Ltd Green Road Branch deals with the following L/C:

• Sight L/C
• Sight Local L/C
• Usence L/C
• Back to Back L/C

Forms of Documentary Credit:

Revocable L/C:

A revocable credit is one where the issuing banks at liberty to revoke i.e. cancels or amend the credit at any time. According to UCPDC, a revocable credit may amend or cancelled by the issuing bank at any moment and without prior notice to the beneficiary before shipment of consignment against the L/C.

Irrevocable Credit:

An irrevocable L/C is one, which can’t be revoked, amended or modified by the bank with the concurrence of the interested parties.

• Parties’ involved if the process of Letter of Credit:
• Importer (Buyer)/ Applicant
• The issuing Bank (Opening Bank)
• The Advising Bank/Notifying Bank
• Exporter/Seller (Beneficiary)
• Confirming Bank
• Negotiating Bank
• The Paying/Reimbursing/Accepting/Remitting bank.

Applicant:

The person/body (customer of the bank) who requests the bank (opening bank) to issue letter of credit. As per instruction and on behalf of the applicant, bank open L/C in line with the terms and conditions of the sales contract between the buyer and seller.

Opening Bank:

The bank which open/issue the L/C on behalf of the applicant/importer. Issuing bank’s obligation is to make payment against presentation of documents drawn strictly as per terms of the L/C.

Advising/Notifying Bank:

The bank through which the L/C is advised/forwarded to the beneficiary (exporter). The responsibility of advising bank is to communicate the L/C to the beneficiary after checking the authenticity of the credit. The advising bank acts only as agent of the issuing bank without having any engagement on their part.

Beneficiary:

Beneficiary of the L/C is the party in whose favor the letter of credit is issued. Usually they are the seller or exporter.

Confirming Bank:

The bank, which under instruction in the letter of credit, adds confirmation of making payment in addition to the issuing bank. It is the done at the request of the issuing bank having arrangement with them. This confirmation constitutes a definite undertaking on the part of conformation to that of issuing bank.

Negotiation Bank:

The bank, which negotiate documents and pays the amount to the beneficiary when presented complying credit terms. If the negotiation of documents is not restricted to a particular bank in the L/C, negotiation bank is the banker of the beneficiary.

Reimbursing/Paying Bank:

The bank nominated in the credit by the issuing bank to make payment stipulated in the document, complying with the reimbursing bank.

Operations of L/C

Import section deals with L/C opening and post import financing i.e. LIM & LTR. Now the procedure from opening L/C to UBL is given below:

Application For Opening L/C:

At first, an importer will request banker to open L/C along with the following documents.

• An application
• Indent or perform Invoice
• Import Registration Certificate (IRC)
• Taxpayer’s Identification Number (TIN)
• Insurance cover note with money receipt
• A bank account in UBL Green Road
• Membership of chamber of commerce.

Recommendations

As per earnest observation some suggestion for the important of the situation are given below:

• To attract more clients UBL has to create a marketing strategy, which will increase the total exporter-import business.
• Effective and efficient initiatives are necessary to recover the default loans.
• Attractive incentives package for the exporter will help to increase the exporter and accordingly it will diminish the balance of payment gap of UBL.
• Long-term training very much required for the foreign exchange official.
• Computerized banking system and latest communication device are the most important elements for this century. So, for the sound and stable foreign exchange operation, UBL has no alternative but the modernization.
• Foreign exchange operations of other banks are more dynamic and less time consuming. UBL should take some initiative to complete with those banks.
• In our country financial problem is great constrain in foreign trade. UBL is very conservative for post-shipment finance. If stays in liberal position the exporter can easily over come from financial constrain.
• Bank can provide foreign market reports, which will enable the exporter to evaluate the demand for their products in foreign countries.
• Segregation of International Trade Transaction from the existing situation i.e. credit aspect to be looked after by credit analyst in the department.
• This department shall only remain engaged with the documentary aspects of International Trade like opening LCS for all types of import and negotiation of export bills.
• The request of the credit facilities in the form of L/C (S), PAD (S), and ECC shall be assessed by a separate department (Credit department) for approval of the component authority of the bank. This department, after approval of the credit lines in the account, shall convey to the foreign trade department the operational condition the facilities for execution.

Conclusion

Banking sector being a service of Bangladesh continues to contribution to a great in the economy of Bangladesh. Uttara Bank Ltd. is one of the leading banking services of the country. Though UBL is the new entrants in the banking industry, it has already shown huge potentials 7 years of operation.

I observe the total foreign exchange department very carefully while completing my internship in UBL. With a keen attention and observation the study has been tried to complete. The following are some extract of the major findings:

• For the effectiveness of the foreign exchange department, UBL has divided the whole department into three major parts, which are Export, Import, and Remittance.
• The monitoring system of the command is strictly maintained here. The executives now and then visit the department, which keeps all the officers alert about their duty.
• Sometime officers show negligence to the clients, which have a negative impact on its service.

I also think that there is bright future waiting for the Uttara Bank Ltd. and UBL is in a position to go as a catalyst for third development in the banking sector in Bangladesh. Another thing I have to mention here that the UBL is going through the oath in which they need to go and as like today it will bring more and welfare oriented activities in the banking sector in the years to come.